VIRBHADRAYYA NAGAYYA SHIVAPPANMATH Vs. BASANGOWDA MUDIGOWDA PATIL

JUDGEMENT

(1.) THIS is a second appeal from a decision of the District Judge of Dharwar, and it raises a question whether the assignee of a lease in this country is liable by privity of estate to the payment of rent to the lessor. The lease in question was granted on January 6, 1926, by the plaintiff to defendant No.1, the term being forty years. On April 1, 1931, the interest of defendant No.1 under the lease was sold in execution proceedings to defendant No.2, who is the present appellant. The sale was confirmed on April 9, 1934, and the certificate was granted on April 14, 1934. THIS suit was started on December 22, 1936, and in it rent is claimed for six years against both the lessee and the appellant as assignee of the lease. The appellant contends, in the first place, that the doctrine of liability of an assignee of a lease by virtue of privity of estate has no application in this country. The question was discussed by a full bench of this Court in Keshavlal Tribhovan v. Adhymu Maganlal (1933) I. L. R. 58 Bom. 327 : s. c. 36 Bom. L. R. 197, F. B. , and in giving judgment I did myself express a doubt as to whether that doctrine could have any application in India, particularly having regard to the definition of ' lease' in Section 105 of the Transfer of Property Act which seemed to me to show that a lessee has no estate in the land. I still feel that technical difficulty, but since that case was decided, the subject has been before the Privy Council in Ram Kinkar Banerjee v. Satya Charon Srimani (1938) L. R. 66 I. A. 50 : s. c. 41 Bom. L. R. 672, 678. In that case their Lordships were considering whether a mortgagee of a leasehold interest was liable on a covenant in the lease by privity of estate, and the actual decision was that under an Indian mortgage, in whatever form, the mortgagor does not part with the whole of his interest in the property and, therefore, the mortgagee, who does not acquire the whole interest of the mortgagor, is not liable by privity of estate under the covenants of the lease. But Lord Porter in giving the judgment of the Board makes these observations (p. 58) : "by English law and by Indian law an assignee of a lease is liable by privity of estate for all the burdens of the lease, burdens which are imposed upon him by the mere assignment, whether he enters into possession or not," and he then referred with approval to two Madras cases in which the point had been decided. In view of that clear expression of the view of the Privy Council, it seems to me that it is not open to any Court in this country to question the doctrine that an assignee of a lease is liable on the covenants by privity of estate.

(2.) A second point taken by the appellant is that, although that may be the position under an assignment inter partes, the doctrine does not apply where, as in the present case, the title of the assignee is derived under a Court-sale which is not followed by an assignment. But the answer to that contention is to be found in Section 65 of the Code of Civil Procedure, which provides that where immoveable property is sold in execution of a decree and such sale has become absolute, the property shall be deemed to have vested in the purchaser from the time when the property is sold and not from the time when the sale becomes absolute. So that the statute operates to vest the property purchased in the purchaser, and no assignment is necessary, nor is it the practice in this country to take an assignment on a Court-sale. In my opinion, the manner in which the interest of the lessee becomes vested in the assignee is immaterial, provided the method is such as in law vests the whole interest of the lessee in the assignee. In my opinion, in this case the assignee did as from the date of the sale acquire the whole interest of the lessee, and as from that date he is liable on the covenants of the lease which run with the land. That was the decision of the learned District Judge, who modified the order of the trial Court by limiting the liability of the appellant to the period from the date of the sale, which is rather less than six years.

(3.) I agree. .